Durbin sides with airlines in Open Skies dispute

Sen. Dick Durbin (D-Ill.) is pushing the Obama administration to wade into a dispute over foreign airline subsidies that has roiled the U.S. aviation industry. 

Unions that represent parts of the U.S. airline industry have alleged Middle Eastern airlines like Qatar Airways, Etihad Airways and Emirates Airlines have received more than $42 billion in subsidies since 2004.

Durbin said in a letter to Secretary of State John Kerry and Transportation Secretary Anthony Foxx that the Obama administration should investigate the subsidies because U.S. airlines say the payments violate the spirit of the Open Skies agreements between the U.S. and the governments of Qatar and the United Arab Emirates, which own the airlines. 

{mosads}“I write to express my concern regarding recent reports that the three largest airlines of the Gulf States of Qatar and the United Arab Emirates (UAE) are receiving substantial government subsidies,” he wrote. “Market distortion caused by state subsidies give these airlines an unfair advantage over U.S. carriers.  As such, I urge you to carefully review this situation and consider appropriate action to uphold the legacy of our Open Skies agreements.” 

The Obama administration said earlier this month that they are launching a review of the airline industry’s claims similar to the one Durbin suggested because the allegations against the Middle Eastern carriers “are asserted in a publicly available report, are of significant interest to stakeholders and all three federal agencies.” 

The decision was seen as a victory for U.S. airlines, but Durbin said he was still concerned about the subsidies because they could negatively affect air service in his home state. 

“The ramifications of these subsidies will be particularly felt in Illinois, which is home to Chicago’s O’Hare International Airport,” he wrote. “O’Hare is the second busiest airport in the nation and is the only U.S. airport supporting two competing international hub networks.  United Airlines and American Airlines support roughly 25,000 jobs in the state and have invested heavily to build international route networks at O’Hare that connect mid-sized and smaller Illinois communities– including Bloomington, Champaign, Decatur, Moline, Peoria, and Springfield–to the rest of the world.” 

Durbin added that “unfair competition by foreign subsidized airlines has the potential to overwhelm U.S. carriers on key international routes and cause air service cuts and job losses as U.S. carriers are forced to exit these routes.

“The administration can help prevent these losses by providing rigorous oversight and consulting with Qatar and the UAE to encourage fair competition in the international aviation marketplace,” he wrote.